Congress Allows Small Employers to Pay for Individual Policies of Insurance

One of the lesser known, but critically significant, changes ushered in by the Affordable Care Act (“ACA”) was a general prohibition on employers reimbursing the cost of their employees’ individual health insurance policies. The failure to adhere to this rule triggers substantial excise taxes that can break the back of many employers. But in a sign that Congress occasionally can come together to enact positive legislation, the passage of the 21st Century Cures Act (the “Act”) in December has brought welcome relief for at least some “small” employers desiring to reimburse employees’ individual health care premiums rather than offering their own group health plans.

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